Pome Company produces a single product: the Core. The following table provides the Core’s details.

For the upcoming year, Pome Company expects to sell 500,000 units of the Core, have total fixed costs of $4,500,000, and face a tax rate of 30% of income. 

Required 

(a) At the expected level of unit sales, what is the after-tax income? 

(b) What is the breakeven unit sales of the Core? 

(c) The marketing manager believes that if the Core’s price is cut by $2 unit, sales will increase by 10%. Is this change desirable from a financial perspective? 

(d) Ignore part (c) when answering this question. The production manager believes that if Pome Company rents a new machine, total manufacturing variable costs (materials, labor, and overhead) per unit will each drop by 10%. What is the annual rent for this machine so that the income with this machine will equal the income in part (a)?

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Selling price... Materials cost.. Labor cost.... Variable overhead cost.. Sales commissions... PER UNIT $30 7 6 2 10% of selling price